AAR to Congress: Freight rail spurs growth

Association of American Railroad (AAR) President and CEO Edward R. Hamberger Tuesday told the House Transportation & Infrastructure Committee's railroads, pipelines and hazardous materials subcommittee that the nation's freight railroads are making record private investments in the country's nationwide network, and plan to spend $24.5 billion in 2013. Hamberger said private freight rail investments are paving the way for moving more people and goods by rail as America's economy continues to grow.

"We invest in our infrastructure so that taxpayers don't have to," said Hamberger. "And we are investing billions in safety technology, new intermodal terminals, and new equipment so that we can continue to meet the demands of the changing marketplace."

In recent years, U.S. freight railroads have been increasing their capital investment commitmens, even in the face of the Great Recession, AAR said. The $24.5 billion the industry expects to invest in 2013 surpasses the record $23 billion the industry invested in 2012, AAR added.

Hamberger noted that railroads are capital intensive and must constantly maintain, upgrade, and improve their networks to ensure they can serve businesses and consumers. While the average U.S. manufacturer spends about 3% of its revenue on capital expenditures, U.S. freight railroads spend around 17%, he said, adding. "The freight rail industry is unique among American freight transportation because the network is primarily privately funded and does not rely on taxpayer dollars.

AAR said railroads also are investing in their employees. More than 175,000 freight railroad employees are among America's most highly compensated workers, Hamberger said. In 2011, the average freight railroad employee earned wages of $74,900 and benefits of $34,000, for total average compensation of $108,900.

"Nothing is more important to railroads than safety, and America's railroads are safer today than ever before," said Hamberger.

As well, AAR said 2012 set a new record for railroad safety, breaking the previous record set in 2011, which in turn broke the record set the previous year. According to the Federal Railroad Administration data, from 1980 to 2012 the U.S. train accident rate fell 80% and the U.S. rail employee injury rate fell 8%. Since 2000, the declines have been 45% and 52%, respectively.